Testimony Prepared for the Pennsylvania Legislature
August 31, 2011
Steven A. Camarota is Director of Research at the Center for Immigration Studies in Washington, DC. He holds a Ph.D. from the University of Virginia in public policy analysis, and a Master’s degree in political science from the University of Pennsylvania.
In recent years he has testified before Congress more than any other non-government expert on the economic and fiscal impacts of immigration. For a number of years he was lead researcher on a contract with the Census Bureau examining the quality of immigrant data in the American Community Survey.
His research has been featured on the front pages of the New York Times, the Washington Post, and USAToday as well as many other media outlets. He has written academic articles for such journals as the Public Interest and Social Science Quarterly. He has also written general interest pieces for such publications as the Chicago Tribune and National Review. He appears frequently on radio and television news programs including CNN, MSNBC, Fox News Channel, NBC Nightly News, ABC World News Tonight, CBS Evening News, National Public Radio, and the Newshour on PBS.
The purpose of my testimony is to explain why a state may wish to support federal immigration enforcement efforts. The goal of state enforcement efforts is to reduce the number of illegal immigrants living in the state. This goal can be accomplished by helping the federal government to remove more illegal immigrants, by discouraging the settlement of new illegal immigrants, and by encouraging the out-migration of those already in the state. In my testimony I will not focus what specific policies a state should adopt, but rather on why a state would want to take action against illegal immigration.
While the primary responsibility for enforcing immigration law rests with the federal government, by partnering with Washington and adopting its own laws, a state can reduce illegal immigration within its borders. There is certainly evidence for this. The Department of Homeland Security estimates that the illegal immigrant population in Arizona declined by 16 percent between January 2008 and January 2010, compared to 7 percent for the nation as whole. The more pronounced drop in Arizona likely reflects, at least in part, the state’s stepped up enforcement efforts even before the much publicized SB 1070 was enacted in April 2010.1
While there are many reasons why reducing illegal immigration constitutes sound public policy, I will focus on two of the most important: reducing job competition for less-educated, native-born Americans and saving taxpayers money.
Numbers and Education Levels. Of the estimated 11 million illegal immigrants in the United States, between two-thirds and three-fourths (seven to eight million) work. All of the available research indicates that illegal immigrants are overwhelmingly concentrated in lower-wage occupations that require relatively few years of education. Not every illegal immigrant has modest levels of education or works at a low-paying job. But in general this does describe the typical illegal immigrant in the United States. My own research indicates that 57 percent of illegal immigrants have not completed high school and another 24 percent have only a high school education.2 Research by the Pew Hispanic Center has come to similar conclusions. Given their education levels, it is not surprising that illegal immigrants are heavily concentrated in farming, fishing, forestry, cleaning, maintenance, construction, food service, food preparation, light manufacturing, and food processing occupations.
Americans Who Compete with Illegals. Because most Americans are more educated and do not work in these occupations, most do not compete with illegal immigrants for jobs. However, the millions of Americans who do compete for jobs with illegal immigrants tend to be the poorest and least educated. There are currently 15.2 million U.S.-born adults of working age (18 to 65) who have not completed high school. There are also 49.1 million U.S.-born working-age adults who have only a high school degree and no additional schooling. Of these two populations, henceforth referred to as the less-educated, 26.8 million were not working in the second quarter of 2011.3 The number and share not working represent historic highs. Even before the current economic downturn, less-educated Americans had generally not done well in the U.S. labor market in recent decades. Their wages, benefits, and labor force participation have all been on the decline for some time. For example, hourly wages for men who had not completed high school declined 22 percent in real (inflation adjusted) terms between 1979 and 2007. Hourly wages for men with only a high school education declined 10 percent between 1979 and 2007 in real terms.4 Between 2000 and 2007 the share of adult natives (18 to 65) without a high school degree holding a job fell from 54 percent to 48 percent. For those with only a high school education, the share employed fell from 73 percent to 70 percent.5
The Picture in Pennsylvania. Good estimates for the illegal immigrant population in the state are difficult to come by. There are perhaps 150,000 illegal immigrants in the state, with 110,000 holding a job.6 In the second quarter of 2011 in Pennsylvania, the unemployment rate for U.S.-born workers without a high school education was 16.1 percent, and for young workers (18 to 29) with only a high school education it was 23.1 percent. For teenagers (16 to 19), unemployment in Pennsylvania was 15.7 percent. If we look at the broader measure of unemployment, referred to as U-6 unemployment by the Department of Labor, which includes those who are discouraged and have given up looking for work, the rates are double or nearly double the more standard measure of unemployment for teenagers and the less educated. In total there are 1.3 million U.S.-born less-educated adults in the state not working.7 The above figure includes those who are unemployed and those not in the labor force.
Reducing the size of the illegal alien population in Pennsylvania would be helpful for the young and less-educated in the state. It is important to note that immigration is not the only factor reducing labor market outcome for the less-educated. Nevertheless, encouraging illegal immigrants to return to their home countries or even to settle in another state is something Pennsylvania can do that would be helpful to its poorest and least-educated workers.
A Labor Shortage? One common argument for not doing anything about illegal immigration or even for offering illegal immigrants amnesty is that there is a shortage of the type of labor provided by illegal immigrants. But if there was a shortage, then wages and employment should be increasing as employers try desperately to recruit new workers and retain the workers they already have. As already discussed, however, the opposite has been happening. Employment and wages have declined for the less-educated. Thus, there is no empirical evidence of a labor shortage. The only evidence of a labor shortage comes from employers of low-wage workers.
Jobs American Won’t Do? Another common argument for tolerating illegal immigration is that immigrants only do jobs that Americans don’t want. There are two fundamental problems with this argument. First, there are no jobs done only by immigrants. Of the 465 civilian occupations, only four are majority immigrant. These four occupations account for less than 1 percent of the total U.S. workforce. Most of the jobs often thought of as predominately immigrant jobs, are in fact overwhelming done by native-born Americans. For example, the American Community Survey from 2005 to 2007 showed that 55 percent of maids and housekeepers are U.S.-born, as are 58 percent of taxi drivers and chauffeurs, 63 percent of butchers and meat processors, 65 percent of construction laborers and 75 percent of janitors.8 It is simply makes no sense to argue that no Americans want such jobs when, in fact, most of the people doing this type of work were born in the United States.
The second problem with the argument that no Americans want these jobs is that wages, benefits, and working conditions have an enormous impact on the desirability of a job. If there really are jobs that Americans will not do at a given wage, then employers can improve compensation or working conditions to attract more workers. We can raise wages in low-wage sectors of our economy, secure in the knowledge that this will not spike inflation because the bottom of the labor market accounts for such a tiny fraction of total economic output. Employers who want access to cheap labor may argue forcefully that they need the workers, but the fact remains that improving compensation and working conditions is the primary way they should deal with this problem. They can also adopt different recruitment strategies or offer non-wage inducements to attract and retain workers, such as providing transportation or more flexible work hours. Allowing the free market to work in this way could significantly improve the labor market prospects for some of the working poor.
Economic Benefits of Immigration. Reducing wages for less-educated Americans can have economic benefits. Owners of capital or consumers, for example, may experience higher returns on investment or lower prices, respectively. But the research on this question makes is clear that any per-capita gain to Americans generated by lowering the wages of the least-educated is “minuscule,” in the words of the nation’s top immigration economist.9 Some advocates of immigration cite a larger economy as a “benefit” of immigration. It is certainly true that by adding people to the United States population immigration makes the U.S. economy larger by many billions of dollars. This is true of both legal and illegal immigration. But this is not a meaningful way of measuring the benefit to natives. Bangladesh has a larger economy than Norway, but it does mean that people in Bangladesh are richer. What matters, of course, is per-capita income. And the research is clear that immigration does not significantly increase the per-capita income of the native-born population.10 Moreover, the net fiscal costs imposed on the native-born population by immigration are large enough to offset any economic gain. This is especially true for illegal immigrants, who are overwhelmingly less educated. As we will see below, there is near consensus that less-educated immigrants are net fiscal drain — using more in services than they pay in taxes.
Education Levels Determine Fiscal Impact. There is general agreement that the fiscal impact of immigration, whether legal or illegal, depends largely on the education level of the immigrants in question, not their legal status. Not surprisingly, the most educated immigrants tend to earn higher wages and pay more in taxes than they use in services, while those with relatively little education tend to have low incomes, pay relatively little in taxes and often use a good deal in public services. In the case of illegal immigrant families, they often receive benefits on behalf of their U.S.-born children who have program eligibility like any other American citizen. If illegal immigrants are allowed to stay in the state, the costs associated with immigrants are difficult to avoid. Among the largest costs illegal immigrant families create at the local level are uncompensated medical care, Medicaid, public education, social services, and incarceration.
Fiscal Research. The National Research Council (NRC) estimates that an immigrant without a high school diploma will create a net lifetime burden of $89,000, and that an immigrant with only a high school education creates a net cost of $31,000. However, an immigrant with education beyond high school creates a fiscal benefit of $105,000.11 It must be remembered that these are net figures. That is, the figures include all the taxes immigrants pay minus all the costs they create. Research by the Heritage Foundation has found that the average household headed by an immigrant who has not graduated high school received $30,160 in direct benefits from all levels of government, but paid only $10,573 in taxes to all levels of government, for a net drain of $19,588 a year. Of this net drain, 45 percent ($8,836) was estimated to be borne by state and local governments.12 Again, it must be emphasized that these are net figures and therefore represent the balance between what immigrant households pay in taxes and use in services. The net negative fiscal impact of less-educated immigrants has enormous implications for the costs of illegal immigrants because, as already indicated, illegal immigrants are overwhelmingly less-educated.
My own research has focused on the impact of illegal immigration at the federal level. I have estimated that illegal immigrant households created fiscal costs for the federal government of $26 billion a year, offset by $16 billion in federal taxes, for a net fiscal deficit of about $10 billion in 2002.13 In a new study, using data from 2009 and 2010, I estimated that that 59 percent of illegal immigrant households with children in the state of Pennsylvania used at least one major welfare program ─ primarily food assistance and Medicaid.14
It is important to recognize that the large fiscal costs illegal immigrants create are not the result of their not working. Most illegal immigrant households have at least one worker, and labor force participation rates tend to be high among illegal immigrants.
The fiscal deficit less-educated immigrants create is a direct result of the limited earnings potential of less-educated workers in the modern American economy. This fact, coupled with the existence of a large and well-developed welfare state, is the reason for the large net fiscal costs. Therefore, it would make much more sense for a state like Pennsylvania to use the very large supply of less-educated workers already in the state, and discourage the settlement of new less-educated workers in the form of illegal immigrants.
It is also worth noting that trying to limit illegal immigrants’ access to public services is not likely to be very effective. This is partly due to the nature of the costs, and partly because much of the fiscal burden is associated with U.S.-born children who cannot be barred from using social programs. Discouraging illegal immigrants from residing in the state is the only real way to reduce the burden on public coffers.
There are many sound reasons for reducing illegal immigration. I have focused on two of the most important in my testimony. As I have tried to make clear, Pennsylvania and the nation as a whole have a very large supply of underutilized less-educated workers. These workers, if properly treated and paid, could replace the illegal immigrant workforce in Pennsylvania, which may number some 110,000. Not only would reducing the illegal immigrant population be helpful to the working poor in the state, it would also be helpful to taxpayers. Seldom can policymakers both assist low-income workers and save taxpayers money at the same time. By adopting policies that reduce illegal immigration, the state legislature can accomplish both goals.
1 Micheal Hoefer, Nancy Rytina, and Bryan Baker, “Estimates of the Unauthorized Immigrant Population Residing in the United States: January 2010”, DHS, http://www.dhs.gov/xlibrary/assets/statistics/publications/ois_ill_pe_20....
2 Steven A. Camarota, “Immigrants in the United States, 2007: A Profile of America’s Foreign-Born Population”, November 2007”, Center for Immigration Studies, http://www.cis.org/sites/cis.org/files/articles/2007/back1007.html.
3 Public-use file of April, May, and June Current Population Surveys.
4 Lawrence Mishel, Jared Bernstein and Heidi Shierholz, “The State of Working America 2008/2009”, Economic Policy Institute, Table 3.16, p.166.
5 Public-use files of Current Population Survey for the third quarters of 2000 and 2007. Figures are for those working and are seasonally unadjusted.
6 Based on my analysis of the March 2009 Current Population Survey.
7 Public-use files of the April, May, and June 2011 Current Population Surveys.
8 Steven A. Camarota and Karen Jensenius, “Jobs Americans Won’t Do? A Detailed Look at Immigrant Employment by Occupation”, August 2009, Center for Immigration Studies, http://www.cis.org/illegalImmigration-employment.
9 George J. Borjas and Richard B. Freeman, “Findings We Never Found”, The New York Times, December 10, 1997,
10 The nation’s top immigration economist, Harvard’s George Borjas, provides a plain-English explanation of why the per-capita gains to the native-born population from immigration must be very small. See “No Pain No Gain”, June 8, 1997, http://borjas.typepad.com/the_borjas_blog/2007/06/index.html. The National Research Council in its 1997 is report, The New Americans: Economic, Demographic, and Fiscal Effects of Immigration, found that the net gain from reducing the wage of the poorest 10 percent of workers would be about 2/10 of 1 percent of GDP. A summary of the report’s findings can be found at www.cis.org/sites/cis.org/files/articles/1999/combinednrc.pdf.
12 Statement of Robert Rector, senior research fellow at the Heritage Foundation, before the U.S. House of Representatives Committee on the Judiciary, immigration subcommittee, May 17, 2007, http://www.heritage.org/research/testimony/the-fiscal-cost-of-low-skill-....
13 Steven Camarota, “The High Cost of Cheap Labor: Illegal Immigration and the Federal Budget”, http://www.cis.org/sites/cis.org/files/articles/2004/fiscal.html.
14 Steven Camarota, “Welfare Use by Immigrant Households with Children: A Look at Cash, Medicaid, Housing, and Food Programs”, Center for Immigration Studies, http://www.cis.org/immigrant-welfare-use-2011.